S.F. mayor outlines deal for hospital project

S.F. DEVELOPMENT

Published 4:00 am, Thursday, May 19, 2011

Mayor Ed Lee is seeking more than $108 million in affordable housing payments, transit improvements and other community benefits from California Pacific Medical Center in exchange for city approval of the controversial plan to build a 555-bed hospital on Cathedral Hill, new city documents show.

The proposal is the mayor's opening bid in what could prove to be spirited negotiations over California Pacific Medical Center's plan to build five different medical facilities across San Francisco, the centerpiece being the massive new hospital proposed for the Van Ness Avenue site of the now-shuttered Cathedral Hill Hotel.

The Sutter Health-affiliated hospital group faces a state-mandated deadline of 2015 to have seismically safe hospital facilities open and running. Hospital officials hope to have city approvals by the end of the year to build the new Cathedral Hill hospital and a nine-story medical office building at the site.

The plan has been dogged by controversy for years, with concerns about the size of the project, the potential traffic problems created by the new hospital, the fate of St. Luke's Hospital in the Mission District, the effect on unionized nurses and the overall impact the changes will have on health care in San Francisco.

To secure needed city approval, the mayor is calling for CPMC to contribute $73 million toward new affordable housing, $4.5 million to replace 25 housing units that would be demolished, $18 million toward streetscape and pedestrian safety upgrades in the Tenderloin and Mission neighborhoods and another $10 million toward planned bus rapid-transit facilities on Van Ness and Geary Boulevard.

Lee's 36-point proposal notably does not scale down the size of the Cathedral Hill project - a source of ire for a coalition of nearby neighborhood groups - but provides a sweeping list of requirements.

The city wants CPMC to provide more than $3.3 million annually to expand medical care for at least 5,200 low-income or uninsured patients, continue to operate St. Luke's for at least 20 years and commit to hiring city residents for 30 percent of the construction jobs for what the city calculates will be a $2.3 billion project.

The total cost to CPMC from the mayor's proposal - which includes giving the city a cut of up to 50 cents on each parking-garage charge and requiring the hospital to provide a monthly Muni pass to any employee who asks for one - is difficult to calculate.

"We have only just begun to review the document, but clearly this is an ambitious request of a nonprofit hospital that is trying to meet its legally mandated seismic obligations," CPMC spokesman Kevin McCormack said Thursday.

McCormack says the projects will create 1,500 new union construction jobs and inject $2.5 billion into the economy.

While the breadth of Lee's conditions may have come as surprise to hospital officials, his spokeswoman said the city's request "is a fair one."

"It is designed to make sure that the project will provide benefits to, and address impacts on, all San Franciscans," mayoral spokeswoman Christine Falvey said. "Mayor Lee looks forward to hearing a response from the hospital and working with them to move the project forward."

Besides the proposed Cathedral Hill hospital and medical office building, CPMC plans over the next 10 years to close and sell its 4.9-acre California campus in Presidio Heights, replace St. Luke's with a new, smaller 80-bed hospital, convert its Pacific Heights hospital campus into an outpatient care facility and put a four-story Neuroscience Institute building by Davies Hospital.

Supervisor Mark Farrell, whose district includes the Cathedral Hill site, called the mayor's plan "a great starting point."

"I think this is a situation where not everyone is going to be happy," Farrell said. "But I think we need to get to a solution that is in the best interests of San Francisco and our health care delivery for the next few generations."

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